Tele2’s third quarter EBITDA up 8.5%, sales down 1%

24 Oct 2007

Sweden’s Tele2 has announced that its EBITDA rose 8.5% year-on-year to SEK1.84 billion (USD286 million) in the three months to 30 September, up from SEK1.66 billion in the same period of 2006, boosted by a larger contribution from mobile telephony and an improved revenue mix across its international fixed and wireless service portfolio. 3Q revenues decreased 1% year-on-year to SEK10.91 billion. Group net customer intake fell to 491,000, compared with 702,000 in Q306, with growth in mobile telephony and broadband partially offset by a continued decrease in the fixed telephony customer base. Subscriber growth was also tempered by a number of recent divestments.

‘Fixed line services continue to be negatively affected by increased competition from mobile services together with alternative services such as VoIP’, Tele2 said. The Swedish group added that its number of corporate customers is rising and business sales now represent 18% of its consolidated turnover. ‘In addition to our already solid corporate customer base in Austria, the Netherlands and Sweden, we are stepping up our efforts in the SME segment in the Baltic countries and Russia, and we see great opportunities also in other countries,’ said CEO Lars-Johan Jarnheimer. The Baltic & Russia division reported a 60% year-on-year rise in EBITDA to SEK770 million.

Tele2’s mobile customer intake in 3Q07 was 865,000, compared with 976,000 a year ago, and mobile turnover rose 17% year-on-year; quarterly mobile ARPU was SEK121, down by SEK6 in twelve months. Jarnheimer said: ‘Once again, Russia was the biggest growth contributor although Sweden had a very strong quarter adding 100,000 new mobile customers. In Sweden, we are finally seeing a clear pick-up in mobile broadband and 3G services during the past two quarters. At the end of Q3 2007 we had 45,000 mobile broadband customers in Sweden. We intend to continue our push into the fourth quarter.’ Broadband resale customers decreased by 10,000 compared with an increase in the year-ago quarter of 20,000, and direct access/LLU customers increased by 77,000, compared with 54,000 in Q306. Broadband resale ARPU fell to SEK228 (SEK257), and direct access/LLU ARPU decreased to SEK518 (SEK617). Total group ARPU slipped to SEK137 from SEK142.

Tele2’s number of fixed telephony customers decreased by 441,000 in July-September 2007, compared with a fall of 348,000 in the corresponding period last year, and the Stockholm-based group expects the decline to continue.

Sweden, Tele2,

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